Jim’s Mailbox

Jim,

I absolutely love Holter’s perception on JSMineset.com yesterday. Our current dilemma couldn’t be put into more simpler terms. So simple, I’ll wager it passed over everyone’s head! Holter is brilliant in his simplicity.

“Can the Fed really raise rates? Do they have the ability to “buy” everything that will be sold? How will they “buy” dollars themselves? Can they buy homecoming dollars using new dollars? Everything will need to be supported and nothing can be allowed to fall.”

Especially this:

“How will they “buy” dollars themselves? Can they buy homecoming dollars using new dollars?”

An interesting comment of GREAT importance! I can’t overemphasize this.

I often wonder how many people in the world have ever given this comment a second thought? It’s a major obstacle to currency stabilization.

What will the government use to purchase excess dollars, if and when they are dumped? You obviously can’t print and use dollars to buy dollars. Duh!

There are only 3 possibilities I can think of:

1. You can only use any foreign currency reserves that you hold (not much in a country that imports more than it exports).

2. Or you must use gold (good luck finding that stash at Fort Knox).

3. Or you can try to stem the tide of selling by raising interest rates sky high! (however, check with the Bank of England and see how well it worked for them! Remember, they raised rates over 5% to a 15% level within hours, fighting the Quantum Fund’s attack on the Sterling. To no avail.)

So kids,

· Raising US interest rates won’t do,

· I sincerely doubt we have that much gold, if any at all!

· Our foreign currencies are limited and dwindling in this economic environment.

What’s left?

Perhaps another win/win play by Soros and Rogers’ Quantum Fund?

CIGA Wolfgang Rech